With crude futures down 2% and all three major indexes in the red, the S&P 500 is now below 2,100 and the Dow Jones index is just 60 points above 18,000. Among the stocks that are doing well today are Crestwood Equity Partners LP (NYSE:CEQP), ServiceNow Inc (NYSE:NOW), CombiMatrix Corp (NASDAQ:CBMX), Raymond James Financial, Inc. (NYSE:RJF), and Arotech Corporation (NASDAQ:ARTX). Let’s find out why investors are buzzing about these five stocks and see how the smart money tracked by Insider Monkey is positioned in them.
Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
Crestwood Surges on Joint Venture Announcement
Crestwood Equity Partners LP (NYSE:CEQP) shares have surged by 50% after the company announced a new joint venture with Consolidated Edison, Inc. (NYSE:ED) named Stagecoach Gas Services LLC. The venture, which will be 50% owned by Crestwood, will develop and own Crestwood’s existing gas storage and pipeline business in Southern New York and Northern Pennsylvania. A subsidiary of Consolidated Edison will purchase 50% of the equity interest in the joint venture for $975 million, giving the entire venture an equity value of around $1.95 billion. Crestwood will use that $975 million to retire debt and improve its leverage and liquidity. The company will cut its quarterly dividend payout to $0.60 per share from the previous $1.375, however. Because of the venture, Crestwood now anticipates distributable cash flow of $275 million-to-$305 million for 2016. Six top funds in our system owned 1.6% of Crestwood Equity Partners LP (NYSE:CEQP) at the end of 2015.
ServiceNow Soars on Earnings
ServiceNow Inc (NYSE:NOW) reported an excellent first quarter, with EPS of $0.09 per share on revenue of $305.9 million. The results beat estimates by $0.02 per share and $5.02 million, respectively. Billings surged by 41% year-over-year, with 249 customers each paying more than $1 million a year. Subscription revenue jumped by 48.6% to $267.4 million, while overall sales rose by 44.3% year-over-year. For the second quarter, ServiceNow expects revenue of $332 million-to-$335 million, and for the full-year, the company expects revenue of $1.355 billion-to-$1.38 billion. Both numbers are in-line with analyst estimates. The number of elite funds (out of our database of 786 savvy investors) with holdings in ServiceNow Inc (NYSE:NOW) rose by nine to 35 during the fourth quarter.
On the next page we examine CombiMatrix Corp, Raymond James Financial Inc, and Arotech Corporation, and see why investors are loading up on these stocks today.
CombiMatrix Shares Up on Strategic Update
CombiMatrix Corp (NASDAQ:CBMX) shares spiked out of the gate after the nano-cap issued a strategic update on its operations, before retreating to gains of 2.33% on the day. In the press release, the molecular diagnostics company’s CEO Mark McDonough went over some of the possible moves the company could look to make:
“Armed with a strengthened balance sheet as a result of our recent capital raise, we believe now is the appropriate time to consider alternatives aimed at advancing our business plan, while continuing to grow organically. We are pleased to be working with the highly experienced team at Torreya and to tap into their expertise in identifying and evaluating opportunities that fit with our business. Among the possible alternatives include acquiring a company or technology that we can tuck in to our growing portfolio or helping another entity enhance its offering by leveraging our expertise and infrastructure. Although there can be no assurance that the exploration of any alternatives will result in CombiMatrix entering into or consummating a transaction, we are committed to enhancing shareholder value in the diagnostics services markets we serve.”
No funds in our database were long CombiMatrix Corp (NASDAQ:CBMX) at the end of 2015. As with all nano-caps, investors should do their due-diligence before buying.
Raymond James Up 10% Due to Earnings
Raymond James Financial, Inc. (NYSE:RJF) is 10% in the green today after beating analyst estimates. For its second quarter of fiscal year 2016, the investment bank earned $0.90 per share on revenue of $1.31 billion, exceeding analysts’ expectations of $0.75 per share in earnings and $1.29 billion in revenue. The company ended March 31 with record client assets under administration of $513.7 billion and a record 6,765 private client group financial advisers. Ken Fisher‘s Fisher Asset Management was among 14 savvy funds that we track that owned shares of Raymond James Financial, Inc. (NYSE:RJF) at the end of 2015.
Arotech Soars on Contract Win
Arotech Corporation (NASDAQ:ARTX) has soared by 8% in morning trading after the company announced its U.S Power Systems Division recently received a $2.6 million contract from the Marine Corps to develop, design, and deliver four MEHPS systems. MEHPS portable systems combine battery technology with existing generator and solar solutions to power forward deployed units.
CEO Steven Esses discussed the contract in a press release:
“The Department of Defense continues to advance initiatives that will increase energy efficiency and enable our forces to perform missions, while acknowledging energy as a potential vulnerability. Demand for renewable and hybrid energy power generation systems continues to grow and Arotech is well positioned to capitalize on a significant opportunity. This contract award is a testament to our team and the performance of our product. We are excited about this opportunity and are optimistic that this award could lead to additional orders in the future.”
Two of the 786 funds that we track owned $677,000 worth of Arotech Corporation (NASDAQ:ARTX)’s shares at the end of 2015.